Wednesday, May 31, 2017

Trump's Proposed Budget Is "A Collection of Lies"

(This photo of Joseph Stiglitz, from Wikipedia, is by Peerapat Wimolrungkarat.)

I have posted about Donald Trump's proposed budget several times. I believe it would be disastrous for this country if enacted. I am not alone in that opinion.

The following is part of an interview Amy Goodman (at Democracy Now) had with Joseph Stiglitz (Nobel Prize-winning economist and Columbia University professor).

AMY GOODMAN: Can you respond to the budget that’s just been revealed?
JOSEPH STIGLITZ: It’s like everything else: It’s made up. You could say it’s a collection of lies put together. It doesn’t make any economic sense. I don’t think anybody who’s looked at it has—can fathom the economics. I mean, you mentioned one thing, the 3 percent growth rate, which is the largest deviation in estimate relative to the CBO on record. You know, when I was chairman of the Council of Economic Advisers, we wanted to be responsible, and we always were conservative and were very careful, getting the views of everybody, wanted to make sure that our numbers were reasonable. He’s made no pretense to be reasonable.
In fact, what’s striking is, while he assumes that there’s going to be more growth, if you look at the budget, it’s designed to reduce growth. He cuts out support for science, for R&D, which is the basis of productivity growth. He cuts out support for job retraining, so when people leave one job, they can be trained for the next job. He cuts out support for Pell grants, so those who have low income can get the education so they can live up to their potential. All these are things that actually lower economic growth. So I would say this is not a growth budget, this is a no-growth budget.
And then he has the numbers, you know, the gall to have things like—you know, just mind-bending. He says he’s going to—elsewhere, he said he’s going to eliminate the estate tax. And his budget says that he’s going to raise several hundred billion dollars’ more money from an estate tax that is zeroed out. Now, you can make a statement that if we lowered the estate tax a little bit, maybe people will be induced to die more, and maybe we’ll get more revenue. You could make that kind of statement. But one thing you don’t need a Ph.D. is, zero times any number is zero. So if you have a zero estate tax, no matter how many people are dying and how wealthy they are, you’re going to get zero revenue.
And remember, what he’s doing, he’s cutting out the estate tax that benefits 0.2 percent of the economy—of our society. You know, you have to have an estate of more than 10 million, if you’re a married couple, in order to pay anything on the estate tax. And meanwhile, he’s cutting benefits for ordinary Americans—education, health, as you mentioned, food, nutrition. It’s not just the system of social protection that we’ve created, but even the bottom safety net that is—catches people when they’re in trouble. . . .
AMY GOODMAN: So, he has said, when he was campaigning—actually, he was campaigning against other Republicans when he made the point, "I’m not going to cut Medicare, Medicaid or Social Security." I mean, we had endless choices of clips to choose from. Joe Stiglitz?
JOSEPH STIGLITZ: He lied. He is cutting Medicaid, the largest cut to Medicaid, even beyond what was in his repeal and replace, that didn’t get very far. These are even bigger Medicaid cuts. In terms of so Social Security, one important part of Social Security is disability payments.
JOSEPH STIGLITZ: And, you know, that’s really important. People do get to say, well, they have auto accidents, they get sick, they get cancer—you know, all kinds of things that make them unable to work.
AMY GOODMAN: They get hurt at work.
JOSEPH STIGLITZ: They can’t work. And he’s cutting that. It’s an important part of our Social Security, of security that people—we provide, as a society, as a basic system of social protection. He’s cutting back on those expenditures. So, all I can say is, you look at that clip, and what he’s doing today is just the opposite.
AMY GOODMAN: So you’re talking about cutting—I mean, already the proposed budget from the House was massive when it came to cuts, something like $880 billion in Medicaid cuts. He’s suggesting $616 more billion—$616 billion more, which would basically gut Medicaid.
JOSEPH STIGLITZ: That’s right. And remember, it’s not just for poor people. It’s a major problem for our elderly, who have to go into old age homes, hospice, you know, all—so, it is an extraordinarily important program. Another way of seeing the massiveness of these cuts is that, if you look at what we call a non-defense discretionary—that is to say, you take out Social Security, you take out Medicare, and you take out military—he’s proposing a 40 percent cut in all these programs. And remember, these programs have been cut year after year for the last 25 years, under both Democrats and Republicans, so it’s not like there’s a lot of fat on this. These are already fairly lean. And what he’s doing is just taking an ax to them, a 40 percent reduction. . . .
AMY GOODMAN: This would drastically shrink low-income student loan program.
JOSEPH STIGLITZ: Oh, some of the programs would be wiped out. So, you know, the American dream, we’ve gradually understood, is really a myth, the fact that anybody can go from the bottom to the top. This is, what is remnant of that American dream, he’s saying, "I’m going to hit it with a sledgehammer.". . .
AMY GOODMAN: Under Trump’s budget, the Environmental Protection Agency faces a 31 percent cut, the steepest cut of any agency or department across the government. . . .
JOSEPH STIGLITZ: Well, you know, of course, every government program has the worst thing. The financial sector and the private sector makes a mistake. Remember we had a crisis in 2008? That was a misallocation of trillions of dollars. So, I don’t want to pretend that every program is perfect. But if you get rid of environmental protection, we’re going to be suffering from dirty air, dirty water, toxic waste, that lower our health. And here’s the point. He wants faster economic growth. A less healthy America is not going to be as productive.
AMY GOODMAN: And the massive increase in military spending? I mean, you’ve written books about this, about the wars and what they cost us.
JOSEPH STIGLITZ: That’s right. And we’re fighting, we might say, a war on terrorism. But another aircraft carrier is not going to win—help us in the war on terrorism. You know, the Cold War, that fight with Russia, in the form that it was, ended a quarter-century ago, and yet we’re spending money as if it hasn’t ended. So we’ve been spending lots and lots of money on weapons that don’t work, against enemies that don’t exist. If he used that criteria that he said for shutting down a department, the Defense Department would have been shut down long ago. You know, the $1,000 toilet, the hammers that cost $100 or things like that—if we used the criteria of misspending, the Defense Department is illustration number one.

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